biz: Why don't ccbill, paycom etc let you CONTEST chargebacks?
 

I found out recently that the procedure for a Visa chargeback (in this neck of the woods anyway) is something along the lines of:

- customer calls to dispute charge.
- bank mails out form for customer to sign.
- when bank receives signed form they apply a provisional credit so that the customer isn't charged interest on the disputed amount.
- if the merchant doesn't respond within 45 calendar days with a good reason then the credit adjustment becomes permanent, and the merchant has to cover the transaction amount plus the applicable fees.

My question is: why don't third party billers pass the chargeback request over to their merchants so that they have a chance to contest it?

Simple, the 15% or less commission they're taking on each sale, minus overhead, doesn't leave enough left over for them to be bothered. $$

I know it's different now with the IPSP (?) system, but what about the days when a merchant had to keep their chargebacks below 2.5%? I think it would be in their best interests to "bother" if it can reduce their chargeback levels.

without a signature its very hard to fight it

bump8char

There's your answer. Once you have your own merchant accounts you realize how easy it is to get screwed by "friendly" fraud. Not a whole lot you can do without a signature. Even with logs, ip's, mails, etc.

What? You have their CCV, their home address, their billing addres, ZIP code, telephone number and IP address.

Me: Mr/MS Visa person, I have all of this information and I can even show where your client accessed my site 95 times from his home IP address during the billing period. So, I am disputing the chargeback.

Visa: Can you fax that information to me?

Me: Nope, faxing is so 1987. I only send information via email. What is your email address.

Visa: Send it to [email protected]

Me: It is on the way.

Visa: I have it. Son-of-a-bitch that was fast.

Me: Yeah, technology you know.

Visa: I can see that you records are in order so I am reversing the chargeback. Good luck getting your 3rd party billing service to give you credit for the reversal. Is there anything else I can help you with today?

Me: Naw, I am vindicated and sassyfied..

Visa: Thank you for using Visa and have a nice day.

Most of that info is irrelevant because it could have been stolen. I think the only way you'd be able to truly contest an online transaction is if you can match the IP address to the owner's address, and that would probably require a court order for the ISP's records. Even then you cannot pinpoint it to a specific person.

Anyway, it looks like the "no signature" issue is the biggie. I received a form letter from my bank today saying something like - we've provisionally reversed the transaction but if the merchant provides a voucher we may need to investigate further. I presume "voucher" means "signed receipt."

Visa doesn't reverse chargebacks that weren't swiped !

You are comparing apples to oranges. VISA rules are so complex that they fill volumes the size of an encyclopedia.

Processors would LOVE to be able to dispute retrieval requests. This doesn't apply to third party processors uniquely. The problem is that with intangible items purchased with a card-not-present transaction, VISA principal issuing banks automatically send a chargeback, and don't wait for the retrieval. ESPECIALLY with the merchant catagory code for adult attached to the transaction.

This is primarily a result of the massive fraud committed through the online adult industry in the late 90s and early 2000s. With no way to prove or disprove delivery of the product, and no way to truely verify the identity of the card user, many very large players pulled some really huge amounts of CC fraud without ever going to jail.

What? What?

Don't they make money either way, and even slam you with additional fees for chargebacks?

Correct!

And even if a dispute is lodged you need to pay the chargeback fee and it goes against your chb% - EVEN IF YOU WIN...... so it's clearly not worthwhile at their %